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Hamilton pact signed -- but is it a Winn for city?

By Grant Welker, gwelker@lowellsun.com

Updated:
06/27/2016 08:49:29 AM EDT

LOWELL -- After months of negotiations, an agreement between the city and a new master developer, Winn Development, for the Hamilton Canal District is signed. The City Council's recent approval made the agreement official.

But beyond the milestone are reminders that the project still has a long way to go -- nearly a decade after master planning for 1.6 million square feet and $800 million in development took place -- before the Hamilton Canal District is back on track with construction.

To start, more than half of the 13-acre district, the area between Dutton Street and the Lower Pawtucket Canal, still lacks utility connections and much in the way of vehicular access. One project that is expected to be a major catalyst for other growth -- a towering courthouse complex -- was recently earmarked for $31 million in the governor's capital budget proposal, but is years away from completion, when it can bring large amounts of people to the area each weekday.

A planned 900-space parking garage on the utility-free side of the project can't be accessed by the Jackson Street side. Potentially solving that problem by building a new bridge was actually cited by the city as a major reason for signing the Winn agreement.

By having a master developer on record, the city becomes eligible for a $2.5 million federal grant to build the bridge.

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Beyond that, two companies that have expressed interest in building on specific parcels in the Hamilton Canal District have yet to sign contracts with the city, even months after placing bids.

Council not head over heels

When the council approved the contract with Winn on May 31, City Manager Kevin Murphy made it clear he wasn't exactly thrilled with the contract he was asking councilors to support.

The agreement was something Murphy said "I haven't been enthralled with" before the council meeting. His first remarks weren't of what Winn could build but that the city needs to apply for funding to help build the bridge.

Discussion of the contract was more about the city's ability to back out of the deal, or the leverage it may have to shape development, than about finding a new developer that can finally get shovels in the ground on a new building.

"We're not going to sit back and wait for them to do something on their own time," Murphy said of Winn, stressing that the city could back out in as few as six months if Winn doesn't file applications for construction permitting.

City Councilor Corey Belanger, who has been outspoken on the need to speed up progress on the project, didn't speak highly of the contract, either.

"This is not the deal I'm looking for, in all honesty," he said, adding that he was happy to see there was an "exit strategy" for the city if the Winn partnership doesn't go well.

"History is not going to repeat itself here," Belanger said, referring to what he called wasted time with Trinity Financial, the former master developer.

Councilor Rodney Elliott described the city as having been "held hostage a little bit to the previous developer."

Councilor Jim Milinazzo spoke confidently about Winn.

"They're committed to the community," he said. "Those involved wouldn't sign anything that they didn't truly believe was going to be successful."

Winn -- which is based in Boston but has offices in Lowell -- did not have any officials at the meeting on May 31.

Contrast Winn's reception with Kronos' detailed presentation and warm welcome it received by the City Council two weeks later, on June 14, when the council voted to give the company a 12-year tax break to move its headquarters from Chelmsford to Lowell. Several Kronos officials and many from the city's Planning Office attended.

Belanger made a request later that night to have Winn officials attend a future meeting to talk about their vision for the Hamilton Canal District.

Off on the wrong foot?

The less-than-optimistic remarks by city officials could set the new partnership off on the wrong foot, after many had been happy about being able to hit a reset button after years of frustration with Trinity Financial.

City officials are touting the upper hand Lowell has in the Winn contract, but the city also doesn't necessarily have much recourse. Though the city has found some interest from companies looking to build on individual parcels, Winn was also the only company to bid for the role of master developer.

Perhaps making Winn's position less enviable is that two of the most visible parcels, both near the Swamp Locks, have been taken out of the contract with Winn. Those locations are where Genesis HealthCare and Watermark are in talks to build.

A third parcel, near the envisioned courthouse, was also taken out of the Winn contract. A developer that the city hasn't yet named publicly is interested in building there, according to the city.

City councilors might also find that Winn isn't necessarily going to want to, or be able to, build the right mix of commercial development that councilors are looking for. The only two parcels Winn is able to develop south of the Lower Pawtucket Canal -- where vehicular access and utility connections exist -- have both always been eyed for residential use.

Winn has found success in Lowell with several housing developments, such as Loft 27 and Counting House Lofts, but officials have been cool to the prospect of too much housing in the Hamilton Canal District.

"If we're really going to grow our tax base, I think most of it should be commercial," City Councilor John Leary said.

Years behind schedule

Winn is also likely to need to rely on a mix of funding sources before beginning construction, just as its predecessor did. Appleton Mills, one of only two buildings to open in the district, received a $13 million state grant, a $34 million construction loan from MassHousing, and $42 million in state and federal historic and housing tax credits.

Without more funding, the project stalled almost entirely. According to the master plan, the district should have had three new buildings open by now, with construction of another three well underway.

Similarly, the city has had to rely on grants to bring utilities and infrastructure from Dutton Street, a project that has not yet begun. Design work for a $30 million, city-owned parking garage is beginning this year.

Trinity withdrew from the project just over a year ago after the city began pushing for the Boston-based firm to reach new construction deadlines.

The contract between the city and Winn does not include any money exchanging hands, other than that Winn would buy a parcel from the city when it wishes to build on that spot. Another developer could obtain rights to build any particular parcel included in the Winn agreement, though Winn would have a right of first refusal.

While Lowell had been looking for more assurances from Winn that it was eager to build in the Hamilton Canal District, the developer was also looking for something tangible from the city. Murphy said Winn wanted to have the courthouse, parking garage and planned bridge completed first, all of which will take several years. But the city didn't want to wait.

It wasn't so much that Lowell wanted to see shovels in the ground, but that it wanted to become eligible for the grant to build the bridge.

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